Stocks continue to struggle, close mostly lower

Jan. 9, 2014
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Traders Mark Muller, left, and Kevin Walsh work on the floor of the New York Stock Exchange Tuesday, Dec. 3, 2013. Stocks are opening lower on Wall Street as investors hold back ahead of economic reports that could influence when the Federal Reserve will start reducing its stimulus. (AP Photo/Richard Drew) ORG XMIT: NYRD104 / Richard Drew AP

by Kim Hjelmgaard, USA TODAY

by Kim Hjelmgaard, USA TODAY

Stocks close mostly lower Thursday as investors await the start of fourth-quarter earnings season and Friday's jobs report for December.

The Dow Jones industrial average fell 17.98, or 0.1%, to 16,444.76 and the Nasdaq composite index dropped 9.42, or 0.2%, to 4,156.19. The Standard & Poor's 500 index eked out a small gain, rising 0.64 to 1,838.13.

Thursday marks the beginning of third-quarter earnings releases for companies. Alcoa, an aluminum maker and former Dow component, reported earnings after the closing bell.

Alcoa was already in the news early Thursday, falling 1.4% to $10.68 on word that an Alcoa subsidiary will plead guilty and pay $384 million for paying bribes to the Middle Eastern Kingdom of Bahrain.

Traders also reacted to disappointing news out of the retail industry. Bed Bath & Beyond plunged 12.5% to $69.75 and Family Dollar fell 2.1% to $64.97 after cutting their earnings forecasts following a disappointing holiday season.

In economic news, the number of Americans seeking unemployment benefits fell 15,000 last week to a seasonally adjusted 330,000, signaling fewer layoffs and steady job growth. The claims report sets the stage for the government jobs report for December. Economists expect employers added 196,000 jobs last month.

A survey Wednesday showed U.S. employment increased in December prompted some concern the Federal Reserve might accelerate the process of winding down bond buying that has supported stock prices. The Fed has been buying $85 billion of bonds a month in a strategy dubbed quantitative easing, or QE, but said in December it will trim that by $10 billion to $75 billion beginning this month.

"The bet is on QE wind-down sooner rather than later," said Mizuho Bank in a report.

The yield on the 10-year Treasury note fell to 2.97% Thursday from 2.99% Wednesday. The yield briefly touched 3% in Wednesday trading.

Benchmark crude for February delivery rose 4 cents to $92.37 in electronic trading on the New York Mercantile Exchange. The contract plunged $1.34 to close at $92.33 on Wednesday after government data showed U.S. demand for gasoline last week fell to its lowest level in a year.

On Wall Street Wednesday, the Dow shed 0.4% to 16,463 and the S&P 500 lost 0.1% to 1,837. The Nasdaq composite rose 0.3% to 4,166.

Benchmarks across Europe were lower Thursday as investors digested the latest remarks from the European Central Bank's top official. Though the ECB kept its interest rates unchanged, President Mario Draghi said that further easing measures are possible in the months ahead as inflation remains low and growth weak.